The 4Cs of agency relationships

Darren Woolley

Darren Woolley is Founder and MD of TrinityP3, an independent strategic marketing management consultancy that assists marketers, advertisers and procurement with agency search and selection, agency engagement and alignment and agency monitoring and benchmarking. With his background as an analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

Choosing or assessing a new creative agency can be difficult whether you are looking at media, digital, advertising or any other type of creative supplier. In my experience I have found that using the 4Cs is incredibly valuable to the assessment process.

  1. Capabilities
  2. Chemistry
  3. Creativity
  4. Commercials

By starting with the 4Cs you will ensure you undertake a full and robust evaluation of an agency and their ability to fulfil your requirements.

Capabilities Assessment

When you are evaluating the agency’s capabilities, you are evaluating their people and whether they will fit as well as whether their experience and methodologies are up to par. A common occurrence is to have the agency actually do a test run of what you need from them. While this can be effective, it is often much more efficient to skip the test run, and evaluate them on their current performances.

A thorough evaluation can be done by:

1. Case studies and examples - It is not sufficient to just read their case studies, we must question the agencies to get in depth details, such as the issues they came up against, the lessons they learned from them as well as the outcomes. When you bring these things into the discussion, you can really get a sense of what is true, especially if you also meet with the team who worked on the account.

2. Getting in touch with current clients - I have found marketers are more than happy to talk about their agencies, both the good and the bad relationships. If you have respect for their time and your questions are well prepared, you can get a lot of useful insider information. This works even if the agency is the incumbent, you can still get relevant information on their client’s experiences.

3. Research the key staff - Yes we all know that you can ask for the resumes of the agency’s key staff, but it is actually more valuable to search them for yourself. With online profiles these days it is easy to search their names, check out their LinkedIn profiles, Slideshare and Twitter accounts. With a bit of research you can come up with quite an array of information on their skills and expertise that a resume will never tell you.

4. Comparing the methodology to real life - Going over process maps and charts can be incredibly boring. But getting the agency to produce a case study on one of its most recent projects against its ‘proprietary’ methodology can give you some quite interesting information. This is especially so when working with media agencies.

Chemistry Alignment

Chemistry is an incredibly important component in terms of defining a working relationship. With the amount of people leaving the measurement of chemistry alignment to chance, you wouldn’t think this was so. The practice many use, of seeing if they ‘click’ when they get together with the agency is not effective. This assessment process is an opportunity to test the agency on a smaller scale, rather than putting them in a full blown evaluation where you could put them through their paces.

Some of the formats of our chemistry sessions have been:

1. Speed dating - Exactly how it sounds. The agency spends roughly 15 minutes with the marketing team. They are given five questions from the marketers, (who have a list of 20 questions designed to see how well they can think on their feet).

2. Intensive Q&A Sessions (90 minutes) - In this situation the agencies present case studies. The marketers then quiz the agencies on the studies including their insights, results and lessons. This gives the marketers a good idea of the agencies commitment and understanding.

3. One-hour sessions - Here the agencies give a ‘why we are perfect for the job’ speech. This is followed up with roughly a 30 minute discussion of the agency’s skills, strengths and weaknesses.

These sessions are designed to test how aligned the agency and marketing team really are. It allows their values, culture, communication styles and more to be uncovered and whether or not they match.

Creative Access

This involves all facets of creative access including strategy, innovation, problem solving, and creative thinking. This is the core of what you're trying to achieve in choosing an agency. Experience, capabilities and expertise are all important, but creative access is the heart of the matter and moves the relationship from a simple supplier of services to a relationship based on collaboration.

The regular approach of providing the agency with a brief, and then expecting them to come back with an idea that you love, has a certain irony to it. I understand that the work and output of the agency is important, but wouldn’t you rather have a relationship based on co-creation? You are the ones with the in depth knowledge of the brand, wouldn’t you rather have a relationship with an agency fostered on working together to attract and engage your audience?

Because of this, any sort of speculative work whether it be creative work, or media strategy or anything else, is NOT recommended. The only situation where this can be ignored is if you are only buying that particular outcome. The majority of the time, what clients are buying is a relationship that is ongoing. The clients and agencies work together productively and because of this collaboration are able to solve problems.

This is why having an all day workshop works so well, and is highly recommended. Being with the agency all day is the ultimate test on both sides. You can test them to whatever point you deem necessary .

Our feedback from the marketers we have worked with, is that they have been able to get a clear view of the agencies they are assessing, and how well they will work together. Also when you include other key stakeholders, and agency roster partners, it is much simpler to see how they will all fit together with your business and current roster of agencies.

Commercial Arrangements

The last of the Four C’s are the commercial arrangements. These include arrangements such as agency remuneration and contractual arrangements. This isn’t always the last process, for example in pitch situations, it comes in between Chemistry and Creative. From the Chemistry process the marketers will have a maximum of three agencies which they will commit to taking through the workshops.

If you are evaluating the agency, then it is important to review not just the level of remuneration but also the resource utilisation. How efficiently is the agency resource being used against the quantity and complexity of the outputs they are producing?

Some of our key points when reviewing and benchmarking agency remuneration are:

  1. Agency resource levels against scope of work delivered
  2. Agency resource mix by function
  3. Agency resource mix within each function
  4. Agency resources costs (salaries)
  5. Agency remuneration fundamentals including billable hours, overhead and profit multiples
  6. Non-retained rates
  7. Production costs on projects
  8. Overall agency profitability on the account

This process gives us a clear view of how the remuneration model is going to affect the scope of work delivery, the marketing budget, and the agency resources provided. With this clarity, we can decipher where there is an opportunity for greater efficiencies through process improvements, incentives and bonuses and resource allocations.

So there you have it. If you are reviewing your agency by going to market or undertaking a review of your current agency arrangements – think the 4Cs – capabilities, chemistry creativity and commercial arrangements.

Tags: agency management

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